The pitfalls of crossing over from broker to bankerElaine Rocciobusiness problems, delegate work, growth
I have been consulting with mortgage brokers probably longer
than any other consultant when it comes to transitioning a company
into mortgage banking, and over the years, I have seen some of the
mistakes brokers make in thinking that being a full-service lender
will fix their problems. The number one problem I have observed is
that mortgage brokers think that they can delegate everything to an
existing work force and they can just incorporate the new duties
into their already overloaded schedules. That does not work!
At the very least, one needs to hire an experienced and
competent funder who is experienced in drawing loan documents and
handling a warehouse line (preferably more than one) and who is
familiar with the latest software specially designed for loan
tracking. That one addition to existing overhead should not be
someone who is drawn from the processing pool and cross-trained on
how to fund a loan. That totally defeats the need for
confidentiality in your new situation. The broker/owner must be
willing to learn and understand the changes that are about to take
place in his shop in order to be successful in his transition to
mortgage banking.
The other point of weakness that can defeat a situation is not
having enough loan production to make it profitable to transition
to mortgage banker status. That is a very key point because a good
many mortgage brokers think that they can upgrade their existing
broker approvals to correspondent approvals and make all kinds of
additional money. That does not work either!
The selection of the appropriate loan correspondent
relationships is critical to success. A mortgage broker needs to be
completely candid about his loan production levels and match his
existing situation to a lender than can really be of benefit to
him. You dont have to have mega millions in loan production to
successfully transition to lender status, but you do have to be
willing to consider entry-level options.
Growing the business with all of the benefits that mortgage
banking has to offer is no different than when you started out as a
mortgage broker. A little at a time, you can gain more knowledge of
the requirements and changes that need to be made, while at the
same time increasing your profitability. Gaining ground in
increments is always the better plan.
Elaine Roccio is a mortgage banking consultant with more
than 20 years of mortgage industry experience and is founder of
Broker to Banker Consulting Services Inc. She can be reached at
(800) 509-5989, e-mail
[email protected] or
visit www.brokertobankerconsultingsvc.com.
